On behalf of the Metropolitan Water District Board of Directors, I am pleased to present the 2005-06 annual financial report. The report provides a comprehensive picture of Metropolitan’s finances for the 2005-06 fiscal year and a snapshot of important issues on the horizon.

When I assumed the role as Chairman of the Board of Directors in November 2006, a few matters took center stage. Although the Colorado River Basin was still in a major drought, California was then reflecting on a record snow pack in the Sierra Nevada and a robust rainy season. Due to the very wet 2005-06 winter season, reservoirs were full and ground water basins were rising again. But as many longtime residents of the West know, conditions can and will change. Within a few months of my being elected Chair, a familiar water story in California emerged. The 2006-07 winter season would be the complete opposite of the previous one. The Sierra snow pack, a significant source of supply to Southern California, would measure one of the lowest levels in decades, and our region would record one of the driest years in more than 100 years. In the Colorado River Basin, another significant source of supply to Southern California, the drought did not subside.

Southern California water agencies plan and prepare for droughts. Metropolitan’s resource and storage programs—developed over the past decade with cooperation of our member agencies—have buffered the effects of these conditions, and there have been no water shortages in our 5,200-square-mile service area. Excellent planning and efficient use of infrastructure have provided our region with a diverse portfolio of water storage facilities and more than 2 million acre-feet of water banked for future use.

Yet, the recent dry weather should remind Southern California of the importance of managing water resources wisely and making the most efficient use of our water supplies. A truly reliable water supply needs to be sustainable far into the future. Through innovation and determination, Metropolitan, our member agencies and our many partners continue to invest in conservation, recycling and other local projects that will stretch our supplies for droughts and for future generations.

Metropolitan also recognizes that a reliable water future must include an emphasis on sustainable resources. Metropolitan strives to reduce our carbon footprint, to use more renewable energy resources and to implement other steps to improve our performance and efficiency.

A sustainable workforce is another priority. Metropolitan continues to have some of the lowest staff turnover in the country, which speaks highly of the workplace environment and training. However, we are concerned about an aging workforce and its possible effects on a system dependent on highly trained technicians and specialists. Metropolitan’s new
apprenticeship program is developing personnel qualified in the mechanical and electrical trades who are ready to step forward when older workers retire. This will help ensure a well-qualified workforce at Metropolitan for decades into the future.

Metropolitan continues to work with businesses, local chambers of commerce and community groups to get the word out about the importance of water to the health, economy and lifestyle of Southern California. Our partnerships with local community and business groups, government leaders and others will continue to serve Metropolitan’s constituents well into the future.

Metropolitan will continue to take on challenges, known and unknown, as we provide for today and prepare for tomorrow. We aim to provide clean, safe and reliable water to the people of Southern California in a thoroughly sustainable way.

Yours truly,

Timothy F. Brick
Chairman